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SINA Shares Strong Growth on Weibo Ad Gains

However, the Chinese internet tech leader followed by reducing its full-year guidance.

SINA Corp.(NASDAQ:SINA) announced strong third-quarter 2018 results on Wednesday morning, driven largely by the relative outperformance of advertising on its Weibo microblogging platform. At the same time, the company reduced its full-year outlook, as macroeconomic headwinds weighed on SINA's core business and smaller supplementary revenue streams.

With shares climbing as much as 8% early today before settling to close up around 2%, let's take a closer look at how SINA kicked off the second half.

Non-advertising revenue declined 7.3% to $73.4 million, as growth from Weibo value-added service (VAS) revenues was more than offset by a combination of revenue-reporting changes, the negative impact of foreign currency exchange, and the "lackluster" performance of SINA's fintech businesses amid regulatory headwinds.

SINA generated cash from operations of $100.8 million.

What management had to say

"We are pleased with SINA's third quarter results," said SINA chairman and CEO Charles Chao in a press release. "Despite intensified competition and macro headwinds, we delivered healthy growth in both revenues and profitability driven by the continued momentum of Weibo business."

During the subsequent conference call, CFO Bonnie Yi Zhang credited Weibo's "robust growth to teams' efforts in product revamp, channel investment, and the content ecosystem cultivation, which further strengthened the social network effect, and broadened our strategic mode to serve public and social interactions among Chinese and the global Chinese communities."

To be fair, Wall Street had already anticipated some weakness; going into the report, consensus estimates predicted SINA's top line this year would arrive at roughly $2.15 billion, well below the midpoint of its old range. In the end, however solid the quarter was, this explains why the stock gave back some of its early gains while still managing to close in the green as investors digested the news.

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